Investing in China Stock Market

China Market at a glance

A huge market, full of great opportunities

China is the second largest economy in the world. It is also the most populous country with a population of over 1.35 billion people. With its ongoing economic reforms and development, China has overtaken Japan as the world's second-largest economy since 2010 and passed the U.S. as the world’s largest trading nation in goods since 2012.

As the leading exporter and second-leading importer in the world, China is becoming the most important trade partner for many countries around the world and begins to play an important and influential role in the global economy.

Over the past few decades, China has been strategically investing and building its presence in the different regions across the globe. For example, it has steadily invested in infrastructure projects in Africa, Pakistan and many other countries.

In terms of investment opportunities, Chinese companies remain attractive to international investors wanting to tap into the buying power of billions of Chinese consumers. No wonder, we’ve seen the rise of the likes of Baidu, Alibaba and Tencent (BATs), which now rank among the top companies in the world.

Investors looking to tap into the Chinese market can invest either through the Shanghai Stock Exchange (SSE) or the Shenzhen Stock Exchange (SZSE).

Investing in the China stock market

While investing directly in Chinese companies may not be as easy as buying and selling shares in your home country, there are different ways you can invest in Chinese companies. For example, Alibaba and Baidu are both listed in the US stock market. Tencent is also listed on the Stock Exchange of Hong Kong.

Here are some of the top companies listed on the Shanghai Stock Exchange

• Sinopec – China Petroleum and Chemical Corporation
• China South Air – China Southern Airlines
• CITIC Securities – CITIC Securities Company
• Shandong Steel – Shandong Iron & Steel Company
• SAIC Motor – SAIC Motor Corporation
• CTV Media – China Television Media Ltd

Why invest in Chinese stocks?

• China is one of the largest and fastest growing economies in the world
• Strong domestic demand makes it less influenced by outside factors
• Wide spectrum of industry choices
• Potential of the RMB appreciation
• Opportunities from China further open up the economy to the outside world
• Investing in China's state-owned enterprises which benefited from its supportive policy